Why is this a risk?
As described by the United States Environmental Protection Agency, sustainability is based on a simple principle: everything that we need for our survival and wellbeing depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations. Sustainability is important to making sure that we have, and will continue to have, the water, materials and resources to protect human health and our environment. Companies and their supply chains now play a role in ensuring that they also protect the social, economic and other requirements that will allow them to support future generations.
Example of where this risk could affect you
You could be engaging a company that focuses on manufacturing in an area or region that has significant water issues, soil destruction or other matters that the manufacturing process is causing to worsen as a result of your engagement.
What sort of suppliers could be engaged in this risk area?
The suppliers that are of highest risk are:
- those that touch the environment when producing products or services on your behalf, have major pollutants or are dangerous to mankind
- likely to be in unregulated markets or markets where enforcement is poor with a history of natural destruction.
How are these risks managed?
The risks of engaging a supplier that has sustainability issues are normally managed through:
- understanding their business and the services that they are applying to you
- where risks arise, investing and helping them to find sustainable ways of producing the goods or services that have been requested.
Which systems and tools do we provide as part of the Supplier Ecosystem™ Initiative to manage these risks?
- Environmental assessments
- Sustainability reviews